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Economy|Financial Markets
Wall Street ends higher with S&P 500 on cusp of a record
The S&P 500 benchmark index, a proxy for the health of retirement and college savings accounts, climbed 0.4 percent for its sixth gain in a row to end as solid earnings stir hope in investors.
Solid earnings from health care companies helped power broad gains for stocks on Wall Street Wednesday and pushed the benchmark S&P 500 within range of an all-time high [File: Brendan McDermid/Reuters]
20 Oct 2021
Solid earnings from health care companies helped power broad gains for stocks on Wall Street Wednesday and pushed the benchmark S&P 500 within range of an all-time high.
The S&P 500, a proxy for the health of retirement and college savings accounts, climbed 0.4 percent for its sixth gain in a row. It closed at 4,536.19. The Dow Jones Industrial Average rose 0.4 percent to 35,609.34 and the tech-heavy Nasdaq fell less than 0.1 percent to end the session at 15,121.68.
“The reason we’re seeing this rally over the last week is that company earnings are looking really good,” said Sylvia Jablonski, chief investment officer at Defiance ETFs. “Most companies are managing inflationary pressures and pricing issues and that’s helping to alleviate concerns about overvaluation and inflation.”
Wall Street cheered solid earnings from a variety of health care companies. Abbott Laboratories, which makes infant formula, medical devices and drugs, rose 3.6 percent after handily beating analysts’ third-quarter profit forecasts. Health insurer Anthem rose 7.2 percent after also reporting strong financial results.
Technology stocks lagged the broader market, however.
Netflix fell 1.9 percent after forecasting earnings for its current quarter that were below analysts’ estimates.
PayPal fell 4.9 percent following reports that it is considering buying digital pinboard and shopping tool Pinterest, which jumped 13.9 percent.
The price of Bitcoin rose 3.5 percent to more than $66,667. It reached an all-time high earlier in the day. The gains came a day after the first exchange-traded fund linked to Bitcoin futures attracted huge interest from investors looking to get into the field of surging cryptocurrencies.
Investors are busy reviewing the latest report cards from companies as they try to get a clearer view of the economic path forward amid rising inflation and a lingering threat from COVID-19.
A key concern remains supply chain disruptions and rising materials costs cutting into profits for many companies. Higher costs for companies could mean higher prices for consumers, which could threaten spending that is supporting the economic recovery.
Oilfield services company Baker Hughes fell 5.2 percent after reporting weak third-quarter financial results, partly because of supply chain problems and higher costs. Brinker International, which operates Chili’s Grill & Bar, fell 9.1 percent after its fiscal first-quarter profit fell far short of analysts’ forecasts as it faces higher commodity and labour costs.
Investors seem to be taking the impact from rising inflation on companies in stride, said Greg Bassuk, CEO at AXS Investments.
“Without big surprises on the downside, or something really outsized, the bulls are overtaking the bears,” he said.
Rising inflation has also put a sharper focus on the Federal Reserve and its plans to start trimming bond purchases that have helped keep interest rates low. The central bank maintained through most of the year that inflation would likely be temporary and tied to the economic recovery, but it has grown more concerned about rising inflation persisting.
SOURCE: REUTERS
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